As expected shares in Boral (BLD) fell yesterday after the building materials group resumed trading following completion of an institutional capital raising to help fund the $A3.6 billion purchase of Utah based, Headwaters.
The takeover, which will boost the company’s size by more than two thirds, will be funded by the share issue, as well as borrowing and Boral’s existing cash.
The shares plunged nearly 20% at one stage in the wake of the issue to the big end of the market, and then the successful auction of an unsold 20 million shares.
Boral shares fell 18.8% to $4.99 on high volumes of about 81.1 million shares, or more than 15 times the daily average having traded.
Boral said its institutional placement and institutional entitlement offer raised about $1.6 billion, with the placement greatly oversubscribed and the entitlement offer strongly supported with a 91% take-up.
Fund managers paid $5.25 a share for about those 20 million shares left over from the institutional component of the $1.6 billion rights issue.
Boral’s brokers closed an auction for 20 million shares at midday on Wednesday, and they cleared at $5.25 each, according to market sources. It means renouncing institutional shareholders – those that did not take up the right to buy new shares under the entitlement offer – will receive 45 cents for each right renounced.
So far no sign of any move to call a meeting of shareholders to discuss this transforming move.
